Broker Pleads Guilty to $500,000 Mortgage Fraud Scheme

Allison Tussey —  July 22, 2009 — Leave a comment

Cheryl Joan Kassebaum, 43, Ozark, Missouri, a former mortgage broker, pleaded guilty to her role in a $500,000 mortgage fraud scheme before U.S. Magistrate Judge James C. England.  As previously reported Mortgage Fraud Blog, Kassebaum was indicted in November 2008.

Kassebaum, a former mortgage broker and co-owner of Metro Consulting Group, admitted that she participated in a scheme to defraud home mortgage lenders from March to July 2006. Kassebaum participated in a conspiracy to obtain mortgage loans for the purchase of a home based on false loan applications, and to return a significant portion of the loan proceeds to the purchasers of the homes without the lender’s knowledge and o! utside the closing of the home purchase.

This scheme involved seven houses with home mortgage loans ranging from approximately $200,000 to more than $400,000. The amount of loan proceeds returned to the borrowers ranged from less than $30,000 to nearly $100,000. Some of the home purchasers subsequently defaulted on the loans, and the homes have been foreclosed or are in the process of being foreclosed. The readily provable economic loss attributable to Kassebaum’s criminal conduct is $497,200.

Kassebaum’s role in the conspiracy was to prepare and submit fraudulent loan applications to lenders. Kassebaum knew those loan applications included overstatements of income and understatements or omissions of liabilities, and falsely represented that the purchaser/borrower intended to reside in the home to be purchased. Kassebaum also facilitated the return of a significant portion of the loan proceeds to herself and other purchasers/borrowers without the lender’s knowledge and outside the closing of the home purchase by routing the returned proceeds through Master Marketing Consultants and then through Metro Consulting Group.

Kassebaum also pleaded guilty to one count of wire fraud, related to the transfer of loan proceeds from the scheme, and one count of money laundering, related to monetary transactions involving criminally-derived property.

Matt J. Whitworth, Acting United States Attorney for the Western District of Missouri, announced the guilty plea.

Under federal statutes, Kassebaum is subject to a sentence of up to 45 years in federal prison without parole, plus a fine up to $1.5 million and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorney Douglas C. Bunch. It was investigated by the Federal Bureau of Investigation and IRS-Criminal Investigation.

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Allison Tussey

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